Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2008-12-01
Number: 08-116/1
Author-Name: Riemer P. Faber
Author-Email: faber@few.eur.nl
Author-Workplace-Name: Erasmus School of Economics, Erasmus University Rotterdam
Author-Name: Maarten C.W. Janssen
Author-Email: maarten.janssen@univie.ac.at
Author-Workplace-Name: University of Vienna, and Erasmus School of Economics, Erasmus University Rotterdam
Title: On the Effects of Suggested Prices in Gasoline Markets
Abstract: This article analyzes the role of suggested prices in the Dutch retail market for gasoline. Suggested prices are announced by large oil companies with the suggestion that retailers follow them. There are at least two competing rationales for the existence of suggested prices: they may either help retailers translate changes in international gasoline spot market prices into retail prices, or they may coordinate retail prices. We show that there is, next to the international spot market prices, additional information in suggested prices that explains retail prices. Therefore, we conclude that suggested prices help to coordinate retail prices.
Classification-JEL: L11, L42, L65
Keywords: gasoline markets, collusion, price setting, suggested prices
File-Url: http://papers.tinbergen.nl/08116.pdf
File-Format: application/pdf
File-Size: 545258 bytes
Handle: RePEc:tin:wpaper:20080116